An Analysis Of The Benefit Conveying Behavior In Boying Investment's Private Placement

For satiation of personal interests,substantial shareholders of listed companies would undertake interest transmissions such as equity financing,connected transaction,etc.With non-tradable shares reform implemented,directed additional become a preferred alternative for listed companies due to its lower threshold and less limits.But due to concentrated stock rights and imperfect regulations and other specific characters of Chinese listed companies,the substantial shareholder has the motive to seek more personal interest in directed additional issuance.Usually,the substantial shareholder would attempt injecting inferior assets and converting cash by reducing holding of assets to acquire extra personal interests in control,stock and many other forms.At the same time,interests of small investors are always hurt.Therefore,studying and researching interest transmission of substantial shareholders in issuance of directed additional is of help in protection of interest of small investors and improve supervision efficiency of authorities.Bothwin Investment Co.,Ltd will be the case for study in this article.By article analysis,case study and case research,this article researches interest transmission behaviors of Bothwin in directed addition.The research found that target substantial shareholders are seeking are mainly extra interests.At the same time,in this directed addition issuance,new changes in object and means of interest transmission has happened: besides substantial shareholders,there are also associated institutional investors.In terms of means of transmission,besides the regular means,there is also equity pledge,cash with associate relations and other means,which are more concealed and diverse.This article contains five parts: Part one,the prologue,introduces background and significance of the study and organizes relevant literature.Part two is theoretical summary which summarizes theories required for study of directed addition issuance and interest transmission.It also analyzes motives,means and performance for directed addition issuance of listed companies.Part three is about case introduction to interest transmission in directed addition issuance of Bothwin,including basic situations,purpose and the whole progress.Part four analyzes motives,means as well as performance of interest transmission in directed addition issuance of the company.Part five is about summary and inspiration of the case.With analysis on this case,the article comes up with the following conclusion:(1)Bothwin has been using various means to interest transmission to substantial shareholders in directed addition issuance.(2)There are multiple parties that are counted as objects of interest transmission in directed addition issuance of Bothwin.(3)The interest transmissions in directed addition issuance of Bothwin reduced performance of the company.(4)Interest of small shareholders were affected by interest transmissions in directed addition issuance of Bothwin.This article hereby proposes to supervision institutes to reduce interest transmissions in directed addition issuance of listed companies in China:(1)clarify detailed standards for selection of objectives of directed addition issuance.(2)Optimize assessment criteria for acceptance of injected assets in directed additions.(3)Loose restrictions on supervising authority of small and medium shareholders.